Federal Award Findings, Questioned Costs and Corrective Action Plan

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Federal Award Findings, Questioned Costs and Corrective Action Plan(Reformatted from FY 2009 Single Audit Report)09-105SNAP Cluster:CFDA No.: 10.551 Supplemental Nutrition Assistance Program, #7AZ400AZ410.561 State Administrative Matching Grants for the Supplemental Nutrition AssistanceProgram, #7AZ400AZ410.561 ARRA—State Administrative Matching Grants for the Supplemental NutritionAssistance Program, #7AZ400AZ4U.S. Department of AgricultureAward Period: October 1, 2007 through September 30, 2008October 1, 2008 through September 30, 2009Special Tests and ProvisionsQuestioned Cost: $11,271FindingCriteria: In accordance with 7 CFR §273.2(a)(2), (b), and (f), the case files for food stamp recipients must supporteligibility and benefit-level determinations. Further, in accordance with 7 CFR §272.10(b)(1), a food stampsystem should be able to be updated for mass changes initiated at the state and federal levels.Condition and context: The Department of Economic Security, Division of Benefits and Medical Eligibility, didnot ensure all required documentation was included in case files for supplemental nutrition assistance recipientsand all recipient information was accurately transferred into the eligibility verification system. Specifically, for 5of 48 recipients tested, auditors noted the case files did not include rent or earned or unearned income verificationdocuments used for determining benefit amounts, which resulted in benefit overpayments of $11,271 for thebenefit period. Additionally, for 4 of 48 recipients tested, the rent or income amounts were entered incorrectlyinto the eligibility verification system; however, the benefit payments were not affected for the benefit period.Additionally, the Division did not apply automated mass updates of federal allotments and standards used forbenefit determination to all open cases. Specifically, for 1 of 48 recipients tested, auditors noted the federalmaximum allotments and standard deduction amounts stored in the eligibility verification system were notupdated to properly calculate the benefit amount, which resulted in an underpayment of $150 for the benefitperiod. This finding only affected the Supplemental Nutrition Assistance Program since the finding did not affectadministrative monies.Effect: Assistance may be granted to ineligible recipients or incorrect benefit determinations could be made thatmay result in over- or underpayments to recipients. It was not practical to extend our auditing proceduressufficiently to determine whether any additional questioned costs resulted from this finding. This finding is amaterial weakness in internal control over compliance and material noncompliance with the Cluster’s special testsand provisions requirements.Cause: The Division did not follow its policies and procedures to retain adequate verification documentation andto properly transfer recipient information into the eligibility verification system at the local offices. Further, theDivision did not have procedures in place to ensure that mass changes to federal tables stored in the eligibilityverification system were applied to all open cases.Recommendation: The Division should enforce the following procedures to help ensure compliance with specialtests and provision requirements.• Retain its supplemental nutrition assistance recipients’ verification documentation to support benefitauthorizations.8
Federal Award Findings, Questioned Costs and Corrective Action Plan(Reformatted from FY 2009 Single Audit Report)• Document all required information in the eligibility verification system to help ensure that benefits areaccurately calculated.Further, the Division should perform tests on its system when mass changes to federal tables occur to help ensurethat all open cases are properly updated.Agency Response: ConcurContact person: Leona Hodges, DBME Deputy Assistant Director, (602) 542-7596Anticipated completion date: July 2010Agency Corrective Action Plan: To ensure all required documentation is included in case files and all recipientinformation is accurately transferred into the eligibility verification system, DBME will continue to performextensive reviews throughout the eligibility determination process to detect and correct errors such as the onesnoted in this finding. This includes case reads by supervisors, quality control reviews, management evaluationreviews, and secondary case reads by quality control staff. During fiscal year 2008, DBME implemented anAccuracy Improvement Plan to improve the quality of services and eligibility determinations. To ensurecompliance, this plan was closely monitored internally and by the Federal Food & Nutrition Services. The errorrate based on case reads in June 2008 was 4.66% compared to 6.07% in June 2007 and 8.26% in 2006. DBMEreceived bonus funding due to the improvement in the accuracy rate. The error rate was within the allowablefederal standard for federal fiscal year 2008. Due to resource issues and increasing caseloads, the error rate beganto increase again in 2009. Accordingly, DBME is making significant changes in the case read process that wererecommended by their federal partners. DBME is also centralizing the quality function in order to provide morefocus, better analysis and a consistent, efficient statewide approach.09-106CFDA No.: 17.225 Unemployment Insurance, #s UI-15108-06-55, UI-15785-07-55, UI-16733-08-55, and UI-18007-09-5517.225 ARRA—Unemployment Insurance, # UI-18007-09-55U.S. Department of LaborAward Period: October 1, 2005 through September 30, 2008October 1, 2006 through September 30, 2009October 1, 2007 through September 30, 2010October 1, 2008 through September 30, 2011Special Tests and ProvisionsQuestioned Cost: N/AFindingCriteria: In accordance with 20 CFR §602.11(d), the Department of Economic Security is required to operate aBenefits Accuracy Measurement (BAM) program to assess the accuracy of unemployment insurance benefitpayments and denied claims. The Benefit Accuracy Measurement State Operations Handbook, ET Handbook No.395, 4th Edition, requires the Division to select a minimum number of payments and denied claims each week,quarter, and calendar year and review them for accuracy.Condition and context: The Department of Economic Security, Employment Administration, Benefit AccuracyMeasurement Unit, did not select the minimum weekly, quarterly, or annual number of benefit payments fortesting. Specifically, for the last 3 weeks of calendar year 2008, the Unit selected 3 cases instead of the requiredminimum of 6; for the fourth quarter of calendar year 2008, the Unit selected 93 cases instead of the minimum of108; and for calendar year 2008, the Unit selected 446 cases instead of the minimum of 480. This finding did notaffect any American Recovery and Reinvestment Act (ARRA) monies since there were no ARRA benefitpayments for calendar year 2008.9
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